Bringing the firm back in, empirically this time

by Donald Tomaskovic-Devey and Dustin Avent-Holt

Once upon a time, Jim Baron and Bill Bielby told us to bring the firm back in to the study of stratification. After editing a special issue in Research in Social Stratification and Mobility on organizational stratification, we are here to report mission accomplished: the firm is back in.

Increasingly processes assumed on the theoretical level to generate and shape inequality, such as categorization, status expectations, social closure, exploitation, organizational habitus, and social networks, are examined empirically within organizational contexts. The relational turn in sociology has reinforced this move by its insistence on embedding action in relational context.

Using a variety of tools the authors of these pieces illustrate several ways in which organizations shape inequality processes and mechanisms. Authors take up classic stratification questions on declining gender job segregation, growing income inequality, distributive justice, job mobility, and the link between education and income. However, they each situate the theoretical story underlying these processes within organizations and then examine them with organizational data.

Joe King, Malte Reichelt, and Matt Huffman take on the dominant explanation of rising inequality in economics “skill biased technological change” and its sociological challenger “class biased technological change.” They show us that, at least for Germany, investments in information technology are not actually increasing income inequality but rather that the kinds of workplaces that make strong information technology investments are already high wage workplaces.

Michael Schweiker and Martin Groẞ link bonus payments to rising income inequality. They find that bonus payments are a critical part of the rise in class-based inequalities, also in Germany, but the extent of these inequalities is mitigated by organizational characteristics such as collective bargaining agreements, skill level in the firm, and firm stability.

Steven McDonald and Richard Benton grapple with the classic question of job mobility, but situate mobility as a firm-level problem and outcome. They employ data on thousands of workers in eleven U.S. workplaces over seven years and find that in high inequality workplaces there are fewer mobility paths into high wage jobs, suggesting that network-based closure mechanisms vary across organizational context.

Eunmi Mun and Mary Brinton examine the counterintuitive, but dominant, thesis that family leave policies undermine gender integration at work. Using longitudinal data on women’s managerial employment in Japanese firms, they find that more generous leave policy actually increases female managerial employment, opening new questions on the link between organizational decision-making and national institutional contexts.

Britni Adams, Joe King, Andrew Penner, Nina Bendelj, and Aleksandra Kanjuo-Mirčela challenge the dominant assumption in economics and sociology that more education has mechanistic beneficial effects on earnings. Looking at post-socialist Slovenia, Adams et al. show that the education-earnings linkage is first institutionally produced by national pay practices and then exaggerated by the growing inequality within and between firms associated with the transition to capitalism.

Finally, Carsten Sauer and Meike May tackle the longstanding question of how workers evaluate whether their earnings are just or not. With German data, Sauer and May illustrate that the social relational context in which earnings are judged as just is within workplaces, via comparison to similarly situated co-workers.

All these studies employ novel organization level data to bring new insights, empirically and theoretically, on these classic questions. Each one demonstrates the value added of an organizational lens on inequality problems.

This special issue puts our empirical money where our theoretical mouths have been for some time. For decades many of us have taken the basic structural and relational contexts of income and employment stratification to be organizations, but as these articles demonstrate we now can routinely observe them as organizational phenomena. And in some important cases, such as the King et al. and Mun and Brinton papers, we can see that these processes are not happening in the way prior theory predicts.

One of the great benefits of moving to a meso level of analysis – i.e. organizations – is that we both theorize and observe at the level of social action and the relationships those actions are embedded within. The structure-agency distinction between micro and macro sociologies dissolves, replaced by observations of social relations embedded in their organizational context and organizations embedded in their institutional fields.

Beyond the science of these questions, practical solutions to problems of stratification become more tractable by taking an organizational lens. Revolutionizing the state may be less central – as it has always been less plausible – and instead we can focus on identifying, highlighting, and perhaps creating organizations that embed our egalitarian values in them as a means to diffuse equality through the organizational landscape. This may daunting in other ways, and will undoubtedly involve debating what we even mean by broad terms like equality and social justice, but as Joan Acker reminds us we all exist within local organizational inequality regimes and so the immediate problem and its solution is more clearly within our grasp.